Indian overnight money rates were virtually unchanged

• tanvi_singh
• July 6, 2009

Indian overnight money rates were virtually unchanged near the reverse repo rate on Wednesday, as banks easily met their funding needs
amid robust cash conditions.

At 1 p.m., the overnight cash rate was at 3.20/30 per cent, scarcely moved from previous close of 3.25/30.

Banks have to report their net liabilities to the central bank every alternate Friday and keep 5 per cent of it with the bank for the two weeks that follow.

Call rate will continue to hover around 3.25 per cent,” said a dealer at a private bank. Volume was relatively less in the inter-bank market as most banks are on surplus cash,

Overnight cash rate tend to stay close to the reverse repo amid easy cash conditions. The money rate has been steady near 3.25 per cent after the central bank cut its main borrowing rate to 3.25 per cent on April 21.

Amount deployed at the daily reverse repo auction rallied above 1 trillion rupees after two federal bonds matured in early April. Another security was redeemed earlier in June, adding to the surplus liquidity.

Banks parked 1.18 trillion rupees with the central bank on Wednesday, showing the current level of liquidity surplus.
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• Last Modified: July 6, 2009
• Filed Under: Latest News, MARKETS, NATION, WORLD